Alright, y'all, apologies for the cliffhanger last week (get caught up here). Your responses were loud and clear: longer emails are great and cliffhangers are dogwater (as my kids say).
Let’s pick up where we left off, shall we?
If you’ll remember, I was 3 months into launching this iPhone screen remanufacturing biz, and things were going amazingly. If you haven’t heard of product market fit (PMF), the official definition is “the degree to which a product satisfies a strong market demand.”
But I’d describe it this way:
Normally when you launch a business it feels like sisyphus rolling a stone uphill. You make progress, but it’s just a constant grind. And if this is happening, that’s okay! Sometimes you just have to get over a hump. And sometimes it will stay a grind forever but still be a profitable, growing business. Other times it means your time is better spent on something else.
But when you DO have product market fit, that stone is chasing you. And the stone = customers = demand. You can’t keep up with it all!
That means you have tapped into something truly unique and special. It means you’ve found a market inefficiency or a supply and demand gap. It means you’ve found product-market fit.
It means drop everything and go HARD.
Anyway, back to iPhone screens. I had found PMF, and so now the playbook is to keep doing that same thing without getting crushed by that dang stone.
Here’s exactly how we outran the stone:
I spent about 7 hours scraping every single iPhone repair shop from Google Maps. Back then, good software for this was very hard to come by. Today it's quite easy with something like Outscraper or a virtual assistant.
In one tab I had the Wikipedia page for every USA MSA (Metropolitan Statistical Area). I remember NYC was first and Carson City, NV was dead last.
On another tab I had my scraping software (I forget the name). One by one I would type:
But….BUT 7 hours later I had a CSV worth a million bucks…or $10m! It was every potential customer. It was my TAM (total addressable market). Now, I always start with this.
But here’s the problem…I don’t like cold calling! Who does? So I went to Upwork and hired 3 virtual assistants and paid them each $5.55/hour to call for me. (Upwork takes 10%)
They were thrilled and so was I.
I used Zoho for a CRM and uploaded my 7 figure CSV.
Then I spent 5 mins typing up a (probably garbage) call script.
Then I waited…
Well, let me back up. I also wanted to sell iPhone parts, too, right? Here was my thesis:
Get our foot in the door with the easy sell - We pay cash for your broken glass.
After a transaction or two we have their trust. Then we check and see if they wanted to buy iPhone parts, too.
They can even use their broken glass credit to buy parts - perfect!
To sell parts I needed a Chinese vendor, and that part was pretty easy.
I went to Alibaba and started messaging dozens of iPhone parts sellers, asking for samples. 2 weeks later 10-15 boxes of iPhone parts arrived on my doorstep, for free!
I had an eye for quality, having just ran and sold iPhone repair shops. So I picked one of the better suppliers and sent him a $17k wire. That was my initial order.
His name was David Su and we’re still friends to this day. But I think that $17k wire was the biggest risk I’ve ever taken, considering it was most of my liquid capital at the time.
Yes, I had just sold my business, but most of the cash I got was an earnout (paid over time), so this was a major risk (that paid off).
David could have ran off with my money, but since he didn’t I ended up paying him millions over the next few years.
He was also willing to buy back my broken screens. One stop shop!
So here’s what I had at this point:
That sounds like a business to me!
What next? My callers got to work! We’d group chat on Skype and I’d answer all of their questions.
I literally never made one cold call. All I’d do is hop on calls with bigger fish at times to close the deal. The VAs had accents, after all.
Turns out, a lot of customers would order parts before we even bought back their screens. There was a ton of demand there, too.
After a few days they didn’t have many questions, but something interesting started happening. Boxes of broken screens started arriving on my doorstep and orders started rolling in!
I had to get a PO box to manage all the volume, and then I outgrew the PO Box and had to find an office/warehouse combo. Some pics I still have:
I had to learn a few tricky things, such as:
Nothing that Google can’t answer!
I ended up flying to China in month 4 to meet my vendors and find a couple new ones.
I never did paid ads or had to learn outbound marketing. I combined a new school business model with old school cold calling!
The real secret? I found a tidal wave (lots of demand), hopped on my board and held on for dear life.
Here’s how the first few years went:
I ended up raising money and then declining the term sheet. Then the business started to shrink, but all that is a story for another day.
I know, I know, we’re only supposed to read about the initial wins and not how things shake out in the end, right? Nah, I think there’s even more to learn from the winding down than from the quick wins.
Nope, this isn’t a cliffhanger, but the whole story is pretty long! Next week I’ll write about something else.
Today’s Takeaways
When I go on long solo bike rides I can ride:
That's the tidal wave. It doesn't matter how nice my bike is or how strong my quads are (super strong). You want the tidal wave AKA tailwinds AKA a massively growing market with tons of demand.
That's ^^ my #1 takeaway of the 7 takeaways.
Any other takeaways I missed? Any questions?
I'm always looking for ideas on what to write about.
Thanks for reading, this was a long one! I value your time, so I hope it wasn't wasted today. Please share this newsletter with someone that would make a killer entrepreneur.
Chris